11/26/2008

Another budget cock up the government hadn't worked out

The rise in the level of fuel duty to supposedly counter balance the cut in VAT might make sense to someone who has no understanding of economics or the tax system, but to any expert, the are obvious problems.

A good example is for some specialist hauliers and other business people who are able to reclaim the VAT on their fuel. Now those of you who have a brain will already be ahead of me here and have twigged that the 2.5% VAT cut means that they cannot reclaim this money,, but they will still pay it because 2.5% has been added to fuel duty.

Ironically there may be be slight price rises for zero-rated food items as this fuel duty price increase to hauliers is passed on to consumers. As usual this will damage thelow paidmost. Not exactly what was intended by the 2.5% VAT cut. Idiots.